The gambling company took a £51.8m charge after Jim Mullen, its new chief executive, made a drastic reassessment of the value of Ladbrokes’ betting shops. The write-down formed part of £78.9m of exceptional items that the company recorded during the first-half, which included the cost of closing 40 shops and the placing its struggling Irish business under court protection.
According to The Telegraph, Ladbrokes swung to a loss from the £27.7m pre-tax profit it posted for the same period last year.
Revenues at the bookie for the six months to the end of June were broadly flat at £588.8m. Adjusted operating profits tumbled by 31.5 per cent to £38.9m, dragged down by the introduction of the 15 per cent point of consumption tax on online gambling in December, and the March increase in gaming machine duty from 20 per cent to 25 per cent.
Mr Mullen only took the helm at Ladbrokes in April, but already the bookie has undergone radical changes. Last month, it agreed a £2.3bn merger with Coral to create what will be the country’s biggest gambling company by betting shops, should the deal receive the green-light from competition regulators.
Ladbrokes’s new boss has also unveiled a new strategy to boost the number of punters that bet with the company both in its shops and online. Ladbrokes has fallen behind fierce rival William Hill, particularly in sports betting, and Mr Mullen has pledged to catch up.
“Our first-half results reflect the challenge facing Ladbrokes,” he said on Tuesday. “While we have some encouraging customer trends, we need to reset the business and invest. The results clearly show why we need to change and why we need to do so quickly.
“In July, we set out an organic plan to create a better business in 2017 with clear targets. While doing this removes the short-term thinking that had come to dominate our actions, we recognise it does create short-term impacts on our profitability.”
Mr Mullen added: “The proposed merger with the Coral Group represents an exciting opportunity for the business but, with completion some way away, the focus for me and my team must be on the here and now of delivering on our organic plan, building a better Ladbrokes and driving performance towards our 2017 targets.”
